Oil prices are unlikely to hit $100 per barrel mark over the next 15 years but could reach $65 to $70 in the next two to three years if OPEC sticks to its decision to cut oil production, Abdullah Bin Hamad Al-Atiyyah, a former president of the organization said.
“This is a reasonable price that would accommodate both consumers and producers,” Al-Atiyyah, who is also Qatar’s former deputy prime minister, said speaking at the 7th Bosphorus Summit in Istanbul.
“Producers are always worried when the oil price is low and consumers are concerned the other way round,” he said.
Commenting on OPEC’s agreement on Wednesday to cut oil production, Al-Atiyyah said the world would wait to see if the organization sticks to this decision and administer it.
“If they are not able to administer it, the world will lose respect for them,” he said, adding that “it is important for the market that they do.”
Al-Attiyah said that in order for oil prices to reach the $65-$70 level, OPEC would need to administer Wednesday’s decision in a disciplined way.
OPEC members on Wednesday unanimously agreed to lower oil production by 1.2 million barrels per day (bpd) down to 32.5 million bpd.
The deal also includes non-OPEC countries, like the world's biggest crude oil producer Russia. Non-OPEC countries are also to cut their oil output by an additional 600,000 bpd, of which 300,000 bpd will come from Russia.
- Oil to maintain strategic importance
Al Attiyah said oil would continue to be a strategic commodity as the world needs a mixture of resources to meet all its energy needs in the future.
“The world is talking too much about renewables. But we need an energy mix. We cannot live only with gas and fuel, and we cannot live only with sun and wind as well,” he said.
Al-Attiyah advised that the world should take steps towards a mixed energy equation, with the expectation that fossil fuels will be depleted in maybe 120 years' time.
“This may seem a long time to us, but for the coming generations, it is only a short time. We must take steps to ensure their future,” he cautioned.
Al Attiyah said countries in Africa, Asia, Latin America and the Middle East would still need a substantial amount of oil in the future to be able to meet their transportation needs.
“Devices such as electric cars and so on can become more wide-spread in industrial countries and can pose a challenge to the domination of fuel in transport,” he said.
“But countries elsewhere are not so lucky in terms of power. Gasoline will keep cars going in the jungle and in the desert, but electricity can’t. Let’s not forget one third of the world still does not have proper electricity distribution. They will need gasoline,” Al Attiyah emphasized.
By Sibel Akbay
Anadolu Agency
sibel.akbay@aa.com.tr